How many trades a strategy produces per unit of time, which converts a per-trade edge into an annual return and a cost bill.
Frequency is the multiplier on everything. At plus 0.25R per trade and 0.8% risk, 50 trades a year returns roughly 10% before compounding; 250 trades returns roughly 50%. It also multiplies commissions, spread and slippage by the same factor.
Higher frequency has one genuine statistical advantage: it produces a usable sample-size far sooner. A strategy with 300 trades a year is evaluable in eighteen months; one with 20 trades a year needs a decade to reach the same confidence, which is why long-horizon discretionary approaches are so hard to validate.
Frequency should be an output of the strategy rather than a target. When a trader decides to trade more, the added trades come from the bottom of the setup quality distribution, and their expectancy is typically zero or negative. See overtrading and trade-frequency-cap.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.
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